"New Jersey Transit Accountability Act"; requires independent audit of NJT.

A1264

ASSEMBLY, No. 1264

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman MICHAEL INGANAMORT

District 24 (Morris, Sussex and Warren)

Co-Sponsored by:

Assemblyman Scharfenberger, Assemblywomen Flynn, Fantasia
and Assemblyman Peterson

SYNOPSIS

���� "New Jersey Transit Accountability Act";
requires independent audit of NJT.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning an independent audit of the New Jersey
Transit Corporation.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� This act shall be known
and may be cited as the �New Jersey Transit Accountability Act.�

���� 2.��� a. Within 90 days of the
effective date of P.L.��� ,

c.���� (C.������� ) (pending before the Legislature as this bill), the New
Jersey Transit Corporation shall hire an independent firm to conduct an audit of
the financial management practices and budget reporting practices of the
corporation since the date of the issuance of the report conducted pursuant to
Executive Order No. 5 of 2018 and prepare and issue a report on the firm�s
findings, which report shall:

���� (1)� include findings on the
financial management and budget reporting of the corporation since the date of
the issuance of the report conducted pursuant to Executive Order No. 5 of 2018;

���� (2)� summarize the impact of
the coronavirus pandemic (COVID-19) on the demand for the corporation�s
services and on the financial and practical needs of the corporation to meet
current and projected long-term demand;

���� (3)� evaluate the
corporation�s current sources of funding and their adequacy in relation to
demand for the corporation�s services; and

���� (4)� recommend policies and
best practices for the corporation to adopt based upon the findings of the
independent firm, including, but not limited to, recommendations on the
decision-making process, corporate governance, personnel hiring and protocols,
and improvement of the customer experience.

���� b.��� The report prepared by
the independent firm pursuant to this section shall be submitted to the
Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the
Legislature.

���� c.��� Within six months of the
issuance of the report required pursuant to this section, the corporation shall
adopt any individual policies and best practices recommended in the report
issued pursuant to this section and in the report issued pursuant to Executive
Order No. 5 of 2018.

���� d.��� Upon the affirmative
vote of seven members of the board of directors of the corporation, the
corporation may opt not to adopt an individual policy or best practice pursuant
to subsection c. of this section.� If the corporation exercises this option,
the corporation shall provide a detailed explanation of why adoption of that
policy or practice is not in the best interest of the corporation within six
months of the issuance of the report required pursuant to this section.

���� e.��� This section shall not
affect any existing obligation of the corporation under law to conduct, or hire
an independent firm to complete, an audit or study, including, but not limited
to, as required pursuant to section 6 of P.L.2018, c.162 (C.27:25-5.24).

���� 3.��� This act shall take
effect immediately and shall expire one year after the issuance of the report
required pursuant to section 2 of this act.

STATEMENT

���� This bill, to be known as the
�New Jersey Transit Accountability Act,� requires that the New Jersey Transit
Corporation (corporation) hire an independent firm to conduct an audit of the
financial management practices and budget reporting practices of the
corporation since the date of the issuance of the report conducted pursuant to
Executive Order No. 5 of 2018 and prepare and issue a report on the independent
firm�s findings and recommendations, which report is to be submitted to the
Governor and the Legislature.

���� Executive Order No. 5 of 2018
resulted in the issuance of the Comprehensive Strategic, Financial &
Operational Assessment of NJ Transit on October 5, 2018.� Among the issues
identified in the assessment is that, for eight years preceding its publication
and despite increasing operation and maintenance costs, the corporation had
been forced to transfer much needed capital funds for capital maintenance due
to dramatically reduced State Operating Assistance.� Through its requirement of
an independent audit, this bill is intended to shed light on the financial
needs and practices of the corporation since the issuance of the 2018
assessment, including the diversion of capital funds for operations.

���� The report for which the
corporation is required to hire an independent firm under this bill is to: (1)
include findings on the financial management and budget reporting practices of
the corporation since the date of the issuance of the report conducted pursuant
to Executive Order No. 5 of 2018; (2) summarize the impact of the coronavirus
pandemic (COVID-19) on the demand for the corporation�s services and on the
financial and practical needs of the corporation to meet current and projected
long-term demand; (3) evaluate the corporation�s current sources of funding and
their adequacy in relation to demand for the corporation�s services; and (4)
recommend policies and best practices for the corporation to adopt based upon
the findings of the independent firm, including, but not limited to,
recommendations on the decision-making process, corporate governance, personnel
hiring and protocols, and improvement of the customer experience.

���� Within six months of the
issuance of the report, the corporation is required to adopt any individual
policies and best practices recommended in the report.� Under the bill, the
corporation is permitted to opt not to adopt an individual policy or best practice,
provided that the corporation provides a detailed explanation of why the adoption
of that policy or practice is not in the best interest of the corporation
within six months of the issuance of the report issued by the independent firm.

���� This bill does not affect any
obligation of the corporation to conduct, or hire an independent firm to
complete, an audit or study under existing law.